N.H. Presses For Decision in DHMC Suit

Lebanon — A legal fight over Medicaid reimbursement rates is threatening to hold up key decisions facing New Hampshire legislators and delay changes to the federal insurance program that could save the state millions of dollars.

Dartmouth-Hitchcock and nine other large hospitals in New Hampshire are suing the state over what it says is an unfair system for reimbursing hospitals that provide care to the poor. That lawsuit, brought in 2011, is continuing to be disputed in federal court.

The state wants to have the case resolved soon and, in a recent court filing argues that prolonging the dispute could affect important decisions over New Hampshire’s Medicaid program.

In a recent court filing, New Hampshire Senior Assistant Attorney General Nancy Smith asked a federal judge to decide soon whether or not to dismiss the suit.

“During the next 45 days significant decisions will need to be made concerning the future of Medicaid in New Hampshire,” Smith wrote in an April 11 court filing on behalf of the state. “Obtaining rulings from the court regarding the outcome on the motions currently pending before this court is significant to the decisions that must be made.”

Legislators are now considering the state’s biennial budget and an expansion of the Medicaid program under the Affordable Care Act, even as the state rolls out a new managed care program for Medicaid, in which third-party organizations coordinate care within a defined network of providers.

Managed care has been touted as a way to allow these third-party companies to find more efficiency in the Medicaid system and New Hampshire officials have estimated it could lead to $15 million in annual savings.

The timeline for moving New Hampshire’s Medicaid program toward a managed care model continues to get pushed back as the three organizations hired to handle the transition struggle to get hospitals and other providers to sign on.

The managed care companies must build a network of doctors, hospitals, pharmacies and other providers to cover the roughly 132,000 Medicaid patients seeking care every month. But the hospitals involved in the lawsuit have been reluctant to sign-on until the dispute is resolved.

At issue is the low reimbursement rates within New Hampshire’s Medicaid system. Dartmouth-Hitchcock and the other nine hospitals sued the state in 2011 over changes that essentially meant they would lose tens of millions of dollars in uncompensated care claims , and then get charged a “Medicaid enhancement tax” on top of that without any guarantee of getting paid back.

A few of the smaller “critical access” hospitals, which were granted priority in receiving reimbursements for charity care, have signed contracts with managed care companies. But the large hospitals involved in the lawsuit continue to hold out, Dartmouth-Hitchcock among them.

“The problem is, we can’t get started with only the critical access hospitals. We do need the litigating hospitals as well,” said Mohamed Ally, president of Meridian Health Plan, one of the three companies handling managed care for New Hampshire. “Some of them have been willing to have a conversation. However, the real issue is that they’re standing behind this thing that (they are) not going to sign anything until the litigation is over.

“It’s really the patients who are suffering at this point.”

But there’s more at stake than just rolling out the new system. Also threatened is an expansion of the state’s Medicaid program and the proposed budget for the next two years.

Gov. Maggie Hassan has included the Medicaid expansion, part of the Affordable Care Act, in her budget proposal. The expanded program would cover an estimated 58,000 additional people in New Hampshire. But the managed care system needs to be in place in order to make sure that expansion is done right, said Rep. Laurie Harding, D-Lebanon, the vice chairwoman of the House Health, Human Services and Elderly Affairs Committee.

“The only way to have that be efficient is to have a really solid managed care program in place,” she said.

Even if all New Hampshire’s hospitals were to sign on to managed care networks today, there is still a 90-day enrollment period for Medicaid beneficiaries, putting the rollout well into the next fiscal year that begins July 1.

No one disputes the need to move to managed care, said Frank McDougall, vice president of government affairs for Dartmouth-Hitchcock. And some of the large hospitals, including Dartmouth-Hitchcock, have at least started discussions with the managed care companies, even if they have not yet signed on.

But the fundamental questions raised in the lawsuit need to be answered, McDougall said. Otherwise, the managed care organizations have no more money to dole out than what the state had — an approach that has amounted to a $100 million annual financial drain for Dartmouth-Hitchcock.

“We are absolutely committed to working with the state and trying to move on here,” he said. “We’re talking about patients and a very needy population and the opportunity to expand Medicaid coverage. We are very interested in resolving this and it would potentially be resolved in the Statehouse and not the courthouse.”